Newby's owner Todd Adams asks bands performing in his Highland Strip bar to stay away from cover songs such as"Mustang Sally" or "Respect" and perform original music instead.
That's because Broadcast Music Inc. (BMI) is suing Adams over copyright infringement after several bands played cover songs in the venue in 2006. BMI issues licenses to radio and television stations, bars, restaurants, and other businesses across the nation for the rights to play 6.5 million songs in its catalog, but Newby's is not licensed with the group.
The federal lawsuit began in May 2007, but a judge ordered mediation between the two parties last week.
"We have a long history with Mr. Adams and Newby's," says Jerry Bailey, a spokesman for BMI. "He was licensed from May 1999 to April 2000 and paid in full. Then the following year, he quit paying his license fees. There was a breach of contract."
Adams says Newby's occupancy is 132 according to the fire code, but BMI says the bar and adjoining theater can safely hold 600 people.
In 2000, Adams says he stopped paying fees after BMI charged Newby's according to the higher capacity figure.
"They came in at first and walked every square inch of Newby's, and then I wrote a check for the whole year," Adams says. "About five months later, I got a bill in the mail from a collection attorney demanding thousands of dollars more than what they'd originally agreed on."
Bailey says Adams has been unable to show documentation from the fire marshal to prove his fire-code occupancy, and when documentation is not available, BMI determines occupancy based on square footage.
The higher the occupancy number, the higher the licensing fee. Money paid to the nonprofit BMI benefits its network of songwriters.
After the original occupancy dispute, a New York judge handed BMI an arbitration award for $11,594. Adams took the issue to local Memphis courts, and the award was set aside. That's when BMI stepped in with the federal lawsuit.
In order to prove Newby's was in violation, BMI sent an undercover researcher into Newby's on several occasions. Armed with a recorder, the researcher documented 21 performances of licensed songs in June and December 2006. In the lawsuit, each violation costs $3,000. The music group is seeking $63,000, as well as $15,000 in legal fees.
Adams says some of those cover songs were played by Memphis artists who typically play original music but may throw in one or two cover songs during their set.
"About 99 percent of the bands who play Newby's are playing original music," Adams says. "That's what Newby's has been known for all these years."
Both Adams and Bailey say they hope the mediation will settle the issue once and for all. "We've never said that we don't want to be compliant [with BMI]," Adams says. "We just dispute the fact that they can tell you, me, or anybody that our fire-code occupancy is not what it is."